Timely education loan repayment is extremely important to keep your credit rating good and avoid extra interest costs. Meticulous planning is extremely necessary to repay the education loans faster. Students who have taken an education loan should compulsorily plan to save more every month after getting a job, so he/she collects corpus in order to pay loan faster. Education loan in India has a 5-7 years repayment period, so the installments are not that high and can be paid easily. Let’s take a look at some tips that can help you pay education loans faster.
Using the moratorium period:
The education loan repayment does not start immediately. Banks levy simple interest on student loans during the moratorium period and course of study. The amounts add up and increase the debt burden. You can pay the interest levied on the principal amount during the moratorium period. Paying interest during the course of study will lower the repayment installments after the moratorium period is over.
Get a job:
Waiting for your dream job is not always a good idea. The employment scenario changes with the economy. An economy slump causes losses of thousands of jobs and it may take long time to get a suitable opportunity. Therefore, you should judge the scenario and take up some job until you get your dream job. Having some job is better than not having one, especially when you have an education loan to repay. Take up job even if it is in sales, there are several things to learn and your experience will grow with every day you spend on a job. Besides having a job also means you will be able to pay education loan repayments on time and clear off the debt early.
If you are finding it difficult to find a good job after completing your higher education or the education loan repayment installment is high, you can consider refinancing your education loan or restructuring it by approaching the bank. Many banks will agree to refinance the loan if the employment market is downward during the repayment period.
With the cost of higher education abroad rising every year, parents have no option but to apply for education loan
to enroll their children in a foreign university. There are several
misconceptions about student loan offered by banks and financial
institutions. Majority of the fears associated with the education loans
are far from truth. Getting education loan in India is not complicated
as thought to be. The eligibility, payment terms, interest rate, tax
rebate and terms of loans are some of the important loan elements that
you should focus upon while applying for a student loan. Let’s take a look at some of these important elements of the student loan and know about the procedure to get an education loan in India.
• Eligibility:
Only Indian resident aged between 16-35 can apply for a student loan.
The applicant must have secured admission to the professional or
technical course before applying for the loan.
• Repayment terms:
the repayment of education loan in India generally starts six months
after taking up a job or one year after completing the professional
course whichever is earlier.
• Tax rebate: The
Government of India offers tax rebate on the interest you pay on the
education loan. The tax rebate is based on Section 80-E of the Income
Tax Act 1961.
• Term of loan: the term of the
loan is generally 7 years which also includes the period when the
borrower is not required to make any repayment.
• Interest rate: the interest rate of education loan is generally in the range of 15%-18%
The
above given information is only general. Every bank and financial
institution has their own terms and conditions, interest rates and
eligibility criteria for the student loan. The maximum loan amount you
can get differs with the financial institution offering it. For
education loans above 7.5 lacs, you need to present collateral.
To
get an education loan, you need to visit the financial institution or
bank which offers student loan. You can talk to education loan
consultant hired by the financial institution who can give you clear
idea about the eligibility criteria and the procedure to apply for the
loan. You need to carry your educational documents including the
application of the foreign university in which you want to enroll. If
you are applying for an education loan above 7.5 lacs, your guardian or
the parent has to sign as co-applicant for the education loan. The role
of the co-applicant in the loan process is that of the primary debtor.
The financial institution may also ask for additional security as
collateral if you are seeking 100% education loan. The education loan will be only granted after you present University’s fee demand letter.
Some
banks and financial institutions have their list of approved
educational institutions and professional courses. The loan procedure is
simple and more quick if you are seeking admission in their approved
list of educational institutions. So, if you have secured admission in
foreign university and looking for an education loan in India then head
towards any bank or financial institution that offers education loan for
higher studies.
Source: http://benoyj.hubpages.com/hub/How-to-get-Education-loan-in-India
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